COVER STORY
TERRY RYDER
FOUNDER OF HOTSPOTTING.COM.AU
Thebiggestmistakesmade
by property investors include
a refusal to spend money on
professional help. A typical
investor will spend $500,000
on a property but won’t invest
$5000 on good advice or $500
on an independent valuation to
ensure the price is right, or even
$50 on a research report to jus-
tify their choice of location. It’s
the worst kind of false economy.
But the standout characteris-
tic of truly successful investors
(and they’re quite rare) is their
willingness to spend on skilled
advisers. So that’s where my
$10,000 would go. This relative-
ly small sum won’t propel me
into my next property but it can
be well spent on specialists
who can help make it happen.
I have the expertise to do
the legwork myself, but I’m
time poor so an investment in a
buyers agent can get me to my
objective faster and with safety.
Kate Hill, of Adviseable, says a
good agent can save you more
than their fee by securing the
right property at a good price.
Another factor neglected by
property investors is maximis-
ing tax deductions by claiming
depreciation. A depreciation
report from specialists like
Washington Brown can be
money wisely spent. “Property
owners could be missing out
on thousands of dollars in tax
deductions through not claiming
depreciation,” says Peter Foldes,
of Washington Brown.TERRY RYDER PROPERTY
M
ost real estate consumers don’t know
that strong growth markets abound
in Australia. They’re missing the best
locations for capital gains because most of them,
over the past two years, have been outside the
major capital cities.
The media’s focus on the boom and then the
bust in Sydney and Melbourne has resulted in
regional Australia being largely overlooked
in real estate coverage.
The tendency to report data in a generalised
way – a single figure to describe the entire nation- has disguised the reality that prices have been
growing in many sub-markets, especially in the
smaller capital cities and in key regional centres.
While Sydney has declined, Newcastle has
thrived. Alongside Melbourne’s downturn have
been Geelong’s boom and the rise of Ballarat
and Bendigo.
The Brisbane market has under-achieved but
the Sunshine Coast has risen, Mackay has led the
recovery of regional Queensland markets affected
by the end of the resources investment boom, and
Townsville is poised for recovery on the back of
infrastructure investment.
While the Hobart market has passed it peak,
Tasmania’s second city, Launceston, continues
to perform strongly.
Recent research by Hotspotting found 89% of
suburbs and towns in regional Victoria had median
house prices higher than they were a year earli-
er. Prices were also up in 85% of regional NSW
locations, 65% of regional Queensland centres and
almost 100% of regional Tasmania.
Yet most real estate consumers believe price
decline has been the norm across the nation. The
rea l it y is t hat t here’s plent y of g row t h to be fou nd
in worthy locations outside the main cities.
A n i nvest ment i n a reg iona l cent re t hat tick s t he
key boxes is potentially a win-win-win situation
for investors: an affordable entry price, higher
rental yields and good potential for capital growth.
Most suburbs in Bendigo have median house
prices in the $300,000s, rental yields are typically
between 5% and 6% and in the past year median
prices have grown 10% in California Gully, 11% in
Heathcote and 6%-7% in a number of other Bendigo
suburbs. In Ballarat, most suburbs have recorded
double-d ig it g row t h i n t he pa st 1 2 mont h s, headed
by 23% in Wendouree and 18% in Golden Point.
Both Ballarat and Bendigo are attracting buyers
(both investors and homeowners) out of Melbourne
because they offer affordability, a different lifestyle
and a reasonable commute.
Several Launceston suburbs have grown their
median prices by more than 15% in the past year.
On the Sunshine Coast, many locations have
had growth above 10%, headed by top-end suburbs
around Noosa, where some markets have jumped
more than 20%.
In Bathurst, in NSW, the median house price
has increased 10% in the past year. Nearby Orange
has had similar growth. In the upmarket coastal
town of Byron Bay, the average annual growth
rate over the past decade has been 9.6%, with the
median house price now above $1.5 million and
typical apartments over $800,000.
Many other centres across regional NSW have
had solid growth around 7%-8%, in contrast to
the decline in Sydney.
Queanbeyan is thriving as an affordable and
well-connected alternative to the suburbs of Canberra.
Adviseable’s Kate Hill says investing in a strong
regional centre is “a no-brainer” because it offers
lower entry prices, higher rental yields and good
potential for capital growth. But the regions fly
under the radar of most investors.
“Most Australians live in capital cities and they
tend to reject the idea of regional investments
because they don’t know those areas as well as
their own backyards,” she says. “There’s also a
perception of low growth – and it’s just not true.
“People are moving to regional cities like Bendigo
and Ballarat in Victoria and Newcastle and Wol-
longong in NSW because there are jobs, affordable
housing and a different lifestyle, as well as major
spending on infrastructure like hospitals and
transport links. There’s always good buyer demand
in these areas.”
Hill says superior cash f low from higher rental
yields is “a pleasant side effect” of investing in
strong regional areas.What regional cities should
be top of mind for property
investors?
WHEREI WOULD
INVEST $10k▲